Honda and Nissan on Thursday terminated a memorandum of understanding under which the two automakers had been discussing a merger, but plan to continue collaborating.
The memorandum was signed by the two automakers in December as the first step toward a merger targeted for 2026. The decision to terminate it comes after discussions by each automaker’s management team and various stakeholders that “considered the surrounding market environment, the objectives of the business integration, and the management strategies and structures post-integration,” a joint statement said.
2024 Nissan Ariya
When talks started, both automakers had discussed transferring their shares to a joint holding company, in which Honda would appoint the majority of directors and a CEO. But Honda later proposed making Nissan a subsidiary. A report earlier this month indicated that this was jeopardizing the planned merger. Such a structure would diminish Nissan’s decision-making authority, and had reportedly caused the automaker to withdraw from negotiations.
Both companies agreed to cease merger talks in order to “prioritize speed of decision making and execution of management measures in an increasingly volatile market environment heading into the era of electrification,” the statement said. But the two automakers will continue working together.
Honda 0 Saloon prototype
“Nissan and Honda will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles,” the statement said. The automakers signed a memorandum of understanding for a strategic partnership covering EVs, hybrids, and software in March 2024 that will continue to move forward, Nissan indicated.
The merger would’ve been a lifeline for Nissan, which has been struggling with declining sales globally, particularly in the U.S. and China. Nissan also owns 34% of Mitsubishi, and the two automakers collaborate as part of an alliance with Renault, but Mitsubishi was reportedly planning to stay out of the proposed merger with Honda.